NYMEX_2 February_2016

Natural gas prices continue to trade at a great bargain for consumers.  For the 13th consecutive month, the natural gas contract settled below $3 per MMBtu.  The February contract settled at $2.189 per MMBtu, the lowest February settlement this market has experienced since 2002.  Weather is certainly the primary driver for recent movement in natural gas prices.  Any below-normal forecasts are driving natural gas prices higher, but the market sentiment remains relatively bearish with the abundance of natural gas in under-ground storage and healthy production numbers.  This is keeping the bulls at bay, until supply and demand realign, which could take longer than expected with the number of wells that have been drilled but uncompleted.  Recently, Bank of America Merrill Lynch cut its natural-gas average price forecast for 2016 to $2.60 per MMBtu from its prior forecast of $3 per MMBtu. For 2017, the bank cut its forecast from $3.50 per MMBtu to $3.20 per MMBtu.

NYMEX_1 February_2016